Lipstick on a Pig

NJ Assembly Bill 1325

on 2012-08-28 Tony Pitale wrote

At first blush, support of NJ Assembly Bill 1325 to expand the number of licenses beyond the current limit of 2 per individual sounds like a no-brainer. After all, who wouldn’t support free enterprise expansion in New Jersey’s tightly controlled market?

But, further investigation reveals that this legislation, serves big business while dismissing (if not entirely ignoring) the numerous independent storekeepers who constitute the backbone of today’s Liquor Store industry. And the trickle-down effect is even greater; the suppliers, service providers, even landlords whose livelihood is based around small businesses would be impacted by the contraction of the small-scale retailer.

Let’s look at some detail.

The model recommended by the legislation will lead to a disproportionate number of Grocery-Store-controlled shops, while merging diverse product lines (think Bailey’s and Cranberry juice) in an attempt to market to an audience that might object to the display of alcohol at every turn (especially if they have their children present).

So mothers will have to explain to their youngster why it’s appropriate to put ‘Fat Bastard’ on a bottle but not to say it in public. No doubt, that will be an easy sell. At least today, they have the option of not taking their children into a Liquor Store.

What about those cashiers? They are charged with productive checkout – speed is the only thing that counts. So now you’re going to slow them down, so they can proof anyone who looks younger than 21. “He looked 30 – I swear” .

But that’s ok. This new law puts an entire class out of work. Remember you can’t sell alcohol until you’re 18. So, most of the cashiers you see today will have to be replaced. And anyone running a retail business knows how easy it is to get lower-wage help. (At least the high-schoolers in the stores I frequent hide their boredom.) How nice to know that this bill will only add to the states nearly-10 percent employment rate.

Does this improve the market from a competitive standpoint? How will consumers benefit? The politicians tell us “of course, the consumers will benefit”. This tired cliché is rolled out time and time again, with little fact to back it up.

How will the consumers benefit? By having more stores to shop in? As of July 31st there were almost 50 stores for sale publicly. (This doesn’t even count those merchants looking to sell without a broker) So, with more than 1% of licenses in the State in play, why would we want more?

By saving money? This is always a slippery slope. Sure that Dewar’s may be on sale at cost, but there are 100 other products that will be marked up to make the profit targets established by the grocers, balancing out that Dewar’s.

So, why, exactly, is this a good idea? I’ve yet to hear from the sponsors of this bill why they feel this takes priority over such mundane issues as property taxes and government pensions. The only public comment on this is to use a Liquor License to ‘attract a grocery to Camden’. But of course! There are only 24 Liquor Stores there now! We certainly need to bring the store per capita rate below 3200! (and remember, today a new license can be issued in your town for every 7500 citizens in a municipality – a stature that won’t change with the new bill).

So, weigh the facts and look at the impact. You’ll find that the deeper you go, the more flaws this bill reveals.

The lipstick may be on the pig but it’s still a swine.